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Loonie Loses Luster on Weak GDP, Fed in Focus

The Canadian Dollar (CAD) weakened against the US Dollar (USD) on Tuesday, weighed down by a combination of factors.

  • Disappointing GDP Data: Canada’s latest GDP figures for February showed a further slowdown, adding pressure to the CAD.
  • Strong US Wages: Higher-than-expected US wage growth data fueled concerns about persistent inflation in the US, strengthening the Greenback.
  • Fed Meeting Looms: Investors turned their attention to the upcoming Federal Reserve policy decision on Wednesday, further dampening risk appetite.

Mixed Performance Against Other Currencies

Despite the decline against the USD, the CAD managed to gain some ground against the Antipodeans (AUD and NZD) in Pacific market trading. However, it lost value against the Euro (EUR).

Technical Analysis: USD/CAD Eyes Upside

The USD/CAD pair reached a fresh five-day high on Tuesday, breaking above 1.3700 and challenging the 1.3750 resistance zone. This suggests potential upside for the pair in the near term. While bids are still below the recent high near 1.3845, buyers are attempting to establish control above the 200-hour EMA at 1.3688.